NEW YORK: Investors aren't sold on a rescue of Spanish banks.
Stocks on Wall Street turned lower at mid-morning Monday, reversing earlier gains, after European countries said they would lend Spain as much as $125 billion to save its ailing financial industry.
Stocks in Europe gave up some of their early gains, too, and borrowing rates for Spain on the bond market crept higher, another indication of investor concern.
The Dow Jones industrial average was down 45 points at 12,508. The Standard & Poor's 500 index was down four points at 1,321.
The Nasdaq composite was down 12 points at 2,846. Spain became the fourth European nation to seek a rescue, after Greece, Portugal and Ireland. A financial crisis has gripped Spain since 2008, when a real estate bust caused big losses for many banks.
The markets fear that if Spain's banks fail, it could lead to a financial crisis around the globe and hurt an already fragile world economy.
The rescue for Spanish banks had sent European stocks higher, with France's CAC-40 and the DAX in Germany surging more than 2 per cent.
Those markets were up less than half a per cent later. The yield on Spanish 10-year bonds climbed 0.29 per centage point to 6.47 per cent. It had fallen earlier in the day.
``The Spanish deal is a temporary fix,'' said Jim Herrick, director of equity trading at Baird & Co. ``There are broader issues in the eurozone that still need fixing.''
Investors are nervously awaiting an election this weekend in Greece that will help determine whether the country is forced out of the 17-member club of countries that use the euro currency.
And Italy said Monday that its economy contracted by 0.8 per cent in the first three months of the year, the worst in three years.
That data stepped up the pressure on the Italian government, struggling to fend off the perception that Italy could be next to seek a bailout.
indiatimes.com
Stocks on Wall Street turned lower at mid-morning Monday, reversing earlier gains, after European countries said they would lend Spain as much as $125 billion to save its ailing financial industry.
Stocks in Europe gave up some of their early gains, too, and borrowing rates for Spain on the bond market crept higher, another indication of investor concern.
The Dow Jones industrial average was down 45 points at 12,508. The Standard & Poor's 500 index was down four points at 1,321.
The Nasdaq composite was down 12 points at 2,846. Spain became the fourth European nation to seek a rescue, after Greece, Portugal and Ireland. A financial crisis has gripped Spain since 2008, when a real estate bust caused big losses for many banks.
The markets fear that if Spain's banks fail, it could lead to a financial crisis around the globe and hurt an already fragile world economy.
The rescue for Spanish banks had sent European stocks higher, with France's CAC-40 and the DAX in Germany surging more than 2 per cent.
Those markets were up less than half a per cent later. The yield on Spanish 10-year bonds climbed 0.29 per centage point to 6.47 per cent. It had fallen earlier in the day.
``The Spanish deal is a temporary fix,'' said Jim Herrick, director of equity trading at Baird & Co. ``There are broader issues in the eurozone that still need fixing.''
Investors are nervously awaiting an election this weekend in Greece that will help determine whether the country is forced out of the 17-member club of countries that use the euro currency.
And Italy said Monday that its economy contracted by 0.8 per cent in the first three months of the year, the worst in three years.
That data stepped up the pressure on the Italian government, struggling to fend off the perception that Italy could be next to seek a bailout.
indiatimes.com
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